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Cabrillo College Foundation bankrolling Yes on Q campaign
by Bruce Holloway
Thursday May 26th, 2016 9:57 AM
The Cabrillo College Foundation, a 501(c)(3) charity, is the major contributor to the Yes on Q campaign. Measure Q is a $310 million bond issue for capital projects at Cabrillo College over the next 15 to 20 years. Michael Machado, treasurer of both the Cabrillo College Foundation and Yes on Q, made a false e-filing last month claiming Yes on Q had neither received nor spent any money as of April 23. The Santa Cruz County Elections Department delayed posting some campaign contributions to Yes on Q for 60 days. © 2016 Bruce Holloway
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The Cabrillo College Foundation contributed $190,000 to the Yes on Q campaign, according to filings with the Santa Cruz County Elections Department.

Measure Q is to authorize $310 million in bonds to pay for capital projects in the Cabrillo Community College District over the next 15 to 20 years. Cabrillo Community College District includes all of Santa Cruz County and parts of Monterey and San Benito Counties.

The Cabrillo College Foundation is a 501(c)(3) public charity. Its "mission is to provide aid supplementary to public tax dollars for the support and benefit of Cabrillo College."

Cabrillo College Foundation Executive Director Melinda Silverstein said the Foundation made a 501(h) election by filing Form 5768 with the IRS. A 501(h) election allows a charity to spend a calculated amount on "lobbying", including direct contributions to political campaigns but not candidates. The Yes on Q campaign paid her to put on at least one fundraiser.

Michael Machado, a Certified Public Accountant with Hutchinson and Bloodgood LLP in Watsonville, is the treasurer of the Cabrillo College Foundation and also of the Yes on Q campaign. On April 24, he e-filed a false Form 460 with the Santa Cruz County Elections Department. It claims the Yes on Q campaign received zero contributions and had zero expenses as of April 23. Form 460 must be signed under penalty of perjury.

In fact, the Cabrillo College Foundation contributed $30,000 to Yes on Q between March 24 and 25, according to a Form 497 received by the Santa Cruz County Elections Department on March 25. The March 25 Form 497 says it includes 2 pages, but the Elections Department staff knows only of 1 page. The Elections Department posted it on its website votescount.com on May 24, 60 days after receiving it.

Machado acknowledged that Yes on Q paid $19,000 by April 23 to COPS Voter Guide, Melinda Silverstein, and others. Machado said Yes on Q hired the same campaign consultant as Cabrillo College. The college paid The Lew Edwards Group at least $47,500 to plan the Yes on Q campaign and paid over $50,000 for postage in the last few months.

The Lew Edwards Group advises local governments how to get bond issues passed. Cabrillo College didn't take some of their advice, such as "Identify all potential project(s), costs" and "Seek demonstrable citizen input on plan" and "Engage your public through a Citizens’ Advisory Committee" and "Initiate Committee prior to action to place measure on ballot".

Santa Cruz County Clerk Gail Pellerin is also the head of the Elections Department. She admitted it was a mistake to accept the March 25 Form 497 for filing without making sure all of the pages were included and to neglect to put it on their website within 24 hours as is their usual practice.

Pellerin also admitted it was a mistake to accept the April 24 Form 460 showing zeroes for contributions during the period from March 24 to April 23 when they had already received a Form 497 showing $30,000 from the Cabrillo College Foundation.

Due to the Elections Department's fumbling and footdragging and Machado's false e-filing, information that the Cabrillo College Foundation was the major backer of Measure Q was withheld from the public for five weeks from March 25 to April 29 and the actual magnitude of their backing was withheld until May 24.

With respect to the Elections Department's mistakes, Pellerin said, "We have a new employee who is being trained. I take full responsibility. The process wasn't managed properly. Crystal is back in the office." Crystal Bertheau, elections department staffer for many years and well known and loved throughout the county, retired in 2015. Pellerin ran for re-election unopposed in 2014.

Some small contributors like Sara Clarenbach and Topsy Smalley seem to be unaware that their contributions to Yes on Q could be made tax-deductible if they were laundered through the Cabrillo College Foundation. They each gave $100 to Yes on Q.
§Yes on Q April 24 Form 460
by Bruce Holloway Thursday May 26th, 2016 9:57 AM
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Zero contributions and zero expenses on page 3. Statement covers period from 3/24/2016 through 4/23/2016. E-Filed on 04/24/2016 at 10:33:41 a.m. Signed on page 1 by Michael W Machado under penalty of perjury.
§Yes on Q campaign amended its Forms 460 and 497
by Bruce Holloway Friday May 27th, 2016 9:37 AM
Yesterday afternoon, the Yes on Q campaign amended its March 25 Form 497 and its April 24 Form 460 which were the subject of the story and the Elections Department posted them on their website. The reason given for amending the Form 460 with all the zeroes was, "Data entry errors on original submission."

Also posted yesterday was a new Yes on Q Form 460 for the period from 4/24 through 5/21. Total contributions are up to $191,325, of which $190,000 came from the Cabrillo College Foundation. They paid $19,000 to Lithographic Reproductions Inc, $42,000 to Admail Express, and $13,000 to The Lew Edwards Group, the campaign consultant also paid by Cabrillo College.

It's difficult for the No on Q campaign to compete with tax-deductible contributions on the other side.

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